Explanation:

Indirect transfers refer to situations where when foreign entities own shares or assets in India, the shares of such foreign entities are transferred instead of a direct transfer of the underlying assets in India. Hence option (d) is the correct answer.

The origin of retrospective taxation can be traced backed to 2012, When Vodafone Ltd. was retrospectively taxed by the Indian tax authorities for a 2007 deal. The 2012 act had amended the IT act to impose tax liability on the income earned from the sale of shares of a foreign company on a retrospective basis (i.e., also applicable to the transactions done before May 28, 2012). The amendments made by the 2012 Act clarified that if a company is registered or incorporated outside India, its shares will be deemed to be or have always been situated in India if they derive their value substantially from the assets located in India. As a result, the persons who sold such shares of foreign companies before the enactment of the Act (i.e., May 28, 2012) also became liable to pay tax on the income earned from such sale. 

The Taxation Laws (Amendment) Act, 2021 nullifies the ‘retrospective taxation’ that was introduced with the Finance Act of 2012. It nullifies this tax liability imposed on such persons provided they fulfil certain conditions. These conditions are:

(i) if the person has filed an appeal or petition in this regard, it must be withdrawn or the person must submit an undertaking to withdraw it,

(ii) if the person has initiated or given notice for any arbitration, conciliation, or mediation proceedings in this regard, the notices or claims under such proceedings must be withdrawn or the person must submit an undertaking to withdraw them,

(iii) the person must submit an undertaking to waive the right to seek or pursue any remedy or claim in this regard, which may otherwise be available under any law in force or any bilateral agreement, and

(iv) other conditions, as may be prescribed

The Act ensures that there cannot exist any future demand by the government for the collection of taxes on the basis of an amendment with retrospective effect. This Act makes the tax regime of India more predictable, increasing the scope of foreign investment into the country as it clarifies the stance of Indian Government on imposition of retrospective taxation.